When a startup is at a stage where they can afford to pay lawyers tens of thousands of dollars, they will do a 'priced round'.

At this point, you are a shareholder owning equity, and you earn a return if the value of that stock goes up over time, and you are able to sell it.

These will convert your investment to stock at a later date if the company raises a 'priced round' from major investors, most often venture capitalists. Most early-stage technology startups use a Convertible Note or Simple Agreement for Future Equity.

The faster the business grows revenue, the faster you earn a return, and the higher your effective interest rate. Unlike a loan, a revenue share returns a fixed amount of money (such as 2X your investment), but the time it takes to repay depends on how well the business does. A simple loan, just like your car loan, has a fixed repayment schedule known in advance. Some local businesses offer a simple loan or revenue share. The amount you may earn depends on the type of investment contract the company is offering.

Dropbox stock info